We recently made a submission to the federal Department of Finance on the Banks’ External Complaint Handling System. Our submission details how Canada’s federal financial consumer protection rules can be improved to better serve consumers’ rights and interests when dealing with their banks.
Background
We know that Canadian seniors are living longer lives and need to make savings stretch further in precarious economic times. Seniors, especially during the COVID-19 pandemic, are living at a material risk of outliving their tax-deferred savings.
Since early 2020, CanAge has been learning about the experiences of older Canadians through first hand conversations in email communications and through educational webinars and discussions. Here are some of the things that we have learned from the public:
- Many older Canadians are living precariously:
- Pensioners, especially in circumstances of corporate insolvency, are coming up short.
- Mandatory RRIF withdrawals are cutting deep into savings
- Rapidly increasing cost of living is making it hard to budget and survive,
- Many seniors are forced to stay in the workforce, living paycheque to paycheque
- Older Canadians find themselves in particularly vulnerable situations:
- Many seniors face financial abuse at the hands of trusted family members or acquaintances
- Many seniors are targeted for scams, especially if they’ve fallen for one already
We also learned that the unclear, complex system for dispute resolution with banks is a deep problem for consumers, particularly for seniors.
CanAge recognized that dispute resolution with financial institutions was an area of serious concern, noting that, “Consumers, especially vulnerable senior consumers, have very little power to resolve complaints against their financial institutions.”
As a result we recommended making the OBSI the single dispute resolution provider for all banking services and investments in Canada and providing the OBSI with binding authority and a robust systemic mandate. You can see a deeply analysis of our recommendations under “E” for Economic Security in our VOICES policy book.
CanAge was in support of the 2018 Government of Canada’s Financial Consumer Protection Framework to help further protect consumers at the bank. In February 2020, the Financial Consumer Agency of Canada (“FCAC”) released a report reviewing the complaint handling process in banking and the effectiveness of ECBs, which we had input into. In recognizing that Seniors in Canada are also drawing income from precarious, potentially volatile sources including a combination of government benefits; private pensions; savings, and other assets; and continued employment income.
Knowing all this, it makes sense that banks should be able to offer their primary customers peace of mind with a complaint handling provider that is not only fair and accessible, but also effective.